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How gender pay gaps happen (and what we can do to close them)

At 8am on April 5th 2018, time ran out for Britain’s companies and public bodies to submit their gender pay gap data. A total of 10,016 firms filed their figures by the deadline - in 7,795 of them, women were paid, on average, less than men highlighting how important it is now that law-makers, employers and (frankly) all of us don’t let the dust settle on the data, writes Kathryn Hindess

For 47 years, it has been illegal to pay women less than men for performing the same role or “work of equivalent value”; this is what equal pay looks like in the UK. But if you work at a big company in the UK (classed as one with more than 250 employees) you are very likely working at a firm that pays men more than women, on average; this is what the gender pay gap looks like.

The gender pay gap exists. That much is undeniable. And closing the gender pay gap is a business no brainer: equal representation means employers have access to a wider talent pool; it can increase profitability; and it has been argued that women actually rank higher than men in traits possessed by outstanding leaders.

So, why does the gender pay gap exist?

Catch men if you can

Let’s start simple. Let’s look to the skies. Because the airline industry reported huge gender pay gaps: more than 45% at EasyJet, Jet2.com, Thomson and Tui. What these statistics don’t show is that pilots are overwhelmingly men. The Air Line Pilots Association, International reports that just 5.18% of pilots are women. So, at the level of a company, or even industry, gender pay gaps can sometimes be explained as being due to an imbalance in the gender ratio of those entering the industry or applying for certain jobs.

The finance industry does not have this excuse. The Goldman Sachs Group Inc. pays women 56% less than men, on average, yet according to female-led business community Genderbuzz: “Graduate intake levels in large financial organisations are now generally 50% female and 50% male with most reputable companies having that split as a firm target.”

It may be that women are not making it into the boardroom. Across the board in the UK, women are underrepresented in the best-paid jobs, when compared to the company as a whole, in 82% of companies. Bonuses in finance are also certainly weighted towards men. For every £100,000 of bonuses that Barclays International hands out, the cut women receive is £21,000.

Insight from the realm of behavioural sciences can help to close this gap, promoting steps such as anonymising CVs, mandating diversity on hiring slates and changing the language used in job advertisements to stop unconscious biases from sneaking in.

In industries such as aviation meanwhile - where finding one female candidate for a pilot role, let alone more than one, is currently statistically improbable - attention should be focused on breaking down gender stereotypes by generating enthusiasm in girls for stem subjects (science, technology, engineering and mathematics) and increasing the visibility of women in aviation (something that British Airways aimed to do in 2014 when its women pilots visited schools and recruitment events).

Encouraging young women to enter the top-paid careers may also help to overturn another shocking reality of the gender pay gap: in as little as a year after finishing university, men are likely to be paid more than women who graduated in the same year with degrees in the same subjects.

Genderbuzz - focusing on the finance sector - points to where women and men start their careers as a possible explanation: “Young women tend to more frequently populate the support functions such as legal, compliance, operations and treasury rather than profit making functions such as trading, sales, investment banking and leveraged finance. These early differences in intake destinations set the scene for the opening up of the gender pay gap in banking and finance which most women are never able to close.”

None of this explains why Ryanair revealed a pay gap of 71.8%, miles ahead of its industry counterparts (in a race that no one wants to win), or why - to use an example from another industry - Telegraph Media Group announced that its pay gap was 35% compared to the Guardian’s 11.3% or the BBC’s 10.7%. Some companies may still benefit most from looking inwards and asking what they are doing differently from their industry counterparts.

And sometimes, it pays for workers themselves to stand up.

When the annual RSA conference - one of the world’s leading information security conferences - first announced its keynote speakers for April 17th 2018, there was only one female listed in the lineup. A group of female technologists decided to take showcasing women in cybersecurity into their own hands, found 15 speakers within five days - 14 of whom were women - and set up their own rival conference (called OURSA) down the road.

The parent trap

There is another glaring reason as to why gender pay gaps exist and it’s gaining a reputation, both in Denmark and in the UK, as being perhaps the most influential of all.

Meet the elephant in the womb.

When it comes to unpacking the causes of the gender pay gap, the significance of children in changing women’s experience of work cannot be overlooked. In a persuasive study published by the Institute for Fiscal Studies, researchers Monica Costa Dias, Robert Joyce and Francesca Parodi, documented the evolution of the gender pay gap in the UK over the past 25 years. And what they found was striking.

The fork between men’s and women’s pay widens when people reach their late 20s. It is easy to point to the arrival of children to explain this gap. And Dias, Joyce and Parodi provide the data to back up this conjecture.

When the gender wage gap is plotted on a graph not by age but by time to or since the birth of a family’s first child, it looks like this: before the arrival of the first child, there is a wage gap of 10%. This is not insubstantial, but it may be explained because men - on the whole - tend to be slightly older than women when the first child is born (and therefore have been in their jobs longer). However, after the first child arrives the line on the graph starts climbing steadily upwards until - after 12 years - the gender pay gap stands at around one third, meaning that women - on average - are paid one third less than men.

One reason for this is that women still take on the lion’s share of childcare, reportedly spending 23 hours on caring for family members each week, compared to the equivalent figure for men of 10 hours. A survey conducted by The Economist and pollster YouGov found that 44-75% of women with children at home had decided to shift the gear of their working lives by either working fewer hours or changing jobs to less demanding roles (for example to jobs that required less travel) after having children. Only 13-37% of fathers had done the same.

Thanks to the Part-Time Work Directive (1997) part-time workers are entitled to the same benefits of training, pay and parental leave as full-time workers, but often it seems that employers view longer working hours as a plus when it comes to picking new leaders. There are a number of legitimate reasons why this might be true: part-time workers may not enjoy the same informal networking opportunities that full-time workers do and working less hours may mean less hours spent practicing, and eventually mastering, workplace skills. Further research is certainly needed to truly understand the causes, yet the result is clear: new mothers suffer from a lack of wage progression.

“It is a huge waste of parents’ talents and women’s talents because they hold a disproportionate share of caring responsibilities in this country. So proper flexible working with progression is important,” says Andrew Bazeley of the Fawcett Society, a leading UK charity for gender equality.

To put the onus of balancing this see-saw on fathers would be a mistake. Just as women’s abilities in the workplace need to be highlighted and recognised more, so too do men’s abilities as caregivers. Childcare in Britain is among the priciest in Europe, so it often makes sense in two-parent households for one parent to stay at home. Once this division of duties has happened - earning a salary on one side, child-rearing and housekeeping on the other - it can be difficult to shake routine. Take into consideration that fathers are twice as likely as mums to have their requests for flexible working rejected and it’s easy to see how traditional gender roles continue.

That’s not to say that attitudes towards the traditional division of gender roles haven’t changed for the better. They have. In 1984 (the year, not the George Orwell book - although you’d be forgiven for thinking so) almost half of the UK public agreed with the following statement: “A man’s job is to earn money; a woman’s job is to look after the home and family.”Thankfully, just 13% now agree with the statement, though this is still more than one in every eight people asked.

As highlighted by the British Social Attitudes survey, it may be that a bigger, so-called “structural lag” exists, “whereby men and societal institutions (parental leave, childcare, employment and so on) have to catch up to with the realities of changing families and women’s new roles” (you could think of it as being like a YouTube video that half the population is hoping will hurry up and finish buffering soon).

An idea gaining traction is job-sharing, exemplified by the Green Party’s leadership since September 2016. Jonathan Bartley and Caroline Lucas were elected on a single ticket in a move that Sophie Walker, Leader of the Women’s Equality Party has commended: “Job sharing breaks down barriers that often prevent people from participating in the workplace - such as those with parenting or caregiving responsibilities, or those with disabilities. This new precedent [Bartley and Lucas are the first job-sharing party leaders in modern British politics] by the Green Party leaders helps to widen participation in our country’s politics.

According to charity Save the Children, effective change to the sound of 870,000 mothers returning to work could also be created by the political party currently in power. In the North East for instance; two-thirds of all out-of-work mums would prefer to work if they could get the childcare they require; childcare that is convenient, reliable and affordable.

Steven McIntosh, Director of UK Poverty Policy at Save the Children, says: “The Government must urgently examine how to bring down childcare costs and ensure that families, particularly those on the lowest incomes, can get the support they need. It’s time to make childcare work for families.”

Making the extent of pay discrepancy between the sexes in the UK an open topic is one small step for transparency that could clearly become one giant leap for gender equality… if only employers, law-makers and workers choose to follow that first small step with many more.

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This report is expressed in binary gender terms. Please note: Lush is made up of a vibrant, diverse group of people and we wish to make clear that we believe that people don’t always fit neatly into conventional pigeonholes

"When it comes to unpacking the causes of the gender pay gap, the significance of children in changing women’s experience of work cannot be overlooked"

This is a highly biased article that seems to say that there is some systematic plot by men to pay women less and the solution is to artificially equal wages without taking other factors into account. While it is popular today to demand equality, a little bit more thought is prudent to define it. The question is do we want equality of opportunity or equality of outcome. I for one are for the former. I don't want to live in a world where I get paid the same as the next person just because we have the same education or have the same designation. depending on who does a better job, we deserve to be rewarded differently. In western society, there is no law at this point in time that denies women any opportunity than say Saudi for example. It is up to each individual to do what they have to do to reach where they want to.
"The gender pay gap exists. That much is undeniable. And closing the gender pay gap is a business no brainer: equal representation means employers have access to a wider talent pool; it can increase profitability; and it has been argued that women actually rank higher than men in traits possessed by outstanding leaders." - if this is so, then any logical business would hire these "outstanding leaders" for the discounted price they're available for. Unless again, there is a plot to oppress women and keep them out of the workforce by paying them less.